Wednesday, February 9, 2005

Graves Pushes to Cap High Interest Rate Loans to Soldiers
Congressman Works on Legislation To Ease Troop's Financial Burden

(Washington, D.C) U.S. Congressman Sam Graves today announced legislation to protect service members from dangerous predatory lending practices. The legislation, H.R. 97 has been referred to the Committee on Veteran's Affairs. Graves said he thought loan rates should be the last thing on soldiers' minds.

"America's soldiers defend our freedom overseas," said Graves. "I do not think they should be taken advantage of at home."

A recent analysis of credit industry studies found that 26% of Military households have done business with high cost instant lenders. Those same soldiers are often then forced to continue taking out loans with higher and higher Annual Percentage Rates (APR) that make it impossible for the original loan to ever be repaid. The average APR for a pay day loan is 300%.

Graves' legislation would cap the APR for soldiers taking out pay day loans at 36%. The legislation though only covers service members and does not affect non-military loans. Graves says he believes we can do better for our troops.

"These businesses are geared toward and targeting our soldiers," said Graves. "Our men and women in uniform should not be treated like a niche market; we depend on them for our freedom and owe them our gratitude."

Graves also is the lead co-sponsor on bi-partisan legislation aimed at erasing the pay gap for National Guard soldiers sponsored by Representative Tom Lantos of California. This legislation rewards employers who pay their activated employees the difference between their civilian and military salary while they are on-duty. It provides a tax credit of 50% for up to $30,000 of the costs incurred by the employer.

"I don't believe that our men and women of the National Guard should take a pay cut for serving their country, said Graves. "I think we should encourage companies to eliminate this pay gap so that activated reservists are not financially penalized."

According to the General Accounting Office, over 40 percent of reservists members deploying to Iraq and Afghanistan have taken a pay cut to serve their country. Currently there are 158,000 reservists and Guard on active duty.